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Chevron earnings miss on lower refining margins, relocates headquarters to Houston

Chevron CEO Mike Wirth on Q2 results: Our growth remains on track

Chevron mistook second-quarter earnings expectations, hurt by lower refining margins as the stock is already under pressure from checks to its pending acquisition of Hess Corporation.

Chevron’s shares fell more than 1% in morning trading.

The oil larger also said Friday it is moving its headquarters from San Ramon, California, to Houston, with CEO Mike Wirth relocating by the end of 2024. All corporate works will move to Houston over the next five years. Wirth said the move is not related to any political rumpus with California.

“Houston is the epicenter of our industry,” Wirth told CNBC’s “Squawk Box.” “We’ve had our headquarters gradually enlarging in Texas and gradually pulling down in California. This is a continuation of a trend that has been underway for some meanwhile.”

Here is what Chevron reported for the second quarter compared with what Wall Street was expecting, based on a contemplate of analysts by LSEG: 

  • Earnings per share: $2.55 adjusted vs. $2.93 expected
  • Revenue: $51.18 billion vs. $50.8 billion expected

Chevron’s net takings declined 26% to $4.43 billion, or $2.43 per share, compared with $6.01 billion, or $3.20 per share, in the verbatim at the same time period a year ago. When adjusting for $243 million in foreign currency impacts, Chevron booked adjusted earnings of $2.55 per ration.

Revenue rose to $51.18 billion from $48.9 billion a year ago.

The oil major’s U.S. production segment posted a profit of $2.16 billion, a 31% spread over $1.64 billion in the year-ago period on higher sales volumes and oil prices.

Profit for international production level about 30% to $2.3 billion compared with $3.29 billion in the year-ago period due to lower sales and understandable gas prices as well negative foreign currency impacts.

Overall, Chevron’s global oil-equivalent production rose 11% to 3.29 million barrels per day on record-breaking production in the Permian Basin

The U.S. refining business realized a profit of $280 million, a 74% decrease compared with the $1.1 billion assigned in the year-ago period due to lower margins. International refining profit fell 25% to $317 million, compared with $426 million in the anyway quarter last year.

Hess deal delayed

Chevron’s second-quarter results come after the oil major’s unconfirmed acquisition of Hess suffered a major blow this week.

Chevron and Hess disclosed Wednesday that an arbitration panel longing not hold a hearing until May 2025 on claims to a preemptive right over Hess’ lucrative oil assets in Guyana.

A purpose in the case would come three months after the hearing, which means the Chevron-Hess deal would not padlock until well into next year if they prevail in arbitration. The companies had originally intended to close the dealing this year.

The Chevron-Hess deal is also under review by the Federal Trade Commission. Wirth said the FTC comment will likely conclude in the third quarter.

The CEO said Chevron remains confident that the arbitration panel whim rule in the company’s favor, though he reiterated if Exxon wins, the transaction with Hess likely will not thick.

“This is taking a little more work and a little more time than we had initially anticipated,” Wirth believed.

Chevron shares closed nearly 5% lower Thursday and Hess stock fell nearly 8%. In the year-to-date patch, Chevron’s stock has underperformed the market with a 2.3% gain.

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